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ITB Berlin: Frailty of forecasting

A notable aspect of this year's ITB, the World's largest tourism fair held annually in Berlin, was the circumspection with which forecasts were accompanied for destinations around the world. Woody Allen famous quip about the future (I think about it a lot because that's where I'll be spending the rest of my life) probably was on a lot of folks' minds.

Expectedly, the region with the varying forecasts and changes in real time was the Middle East although by week's end Japan supplanted them proving the need to manage the present well to come up with a better future. The unrest in Libya resulted in thin attendances across the region's stands. While Egypt's delegation had an upbeat demeanor with its vast (and hurriedly adapted) display area showing live video of the Februrary revolution, it had few visitors for much of the fair while that of Libya wore a forlorn look. Dubai sought eagerly promote itself as a safe haven with an emphasis on families and was one of the few willing to hazard an estimate of the future that involved growth.

Germany, the host country, in contrast seemed to enjoy seemingly unbridled growth in the aftermath of the financial crisis with 11% growth in 2010 and is the second most popular destination in Europe. The Middle East crisis seemed to benefit Spain and Turkey. Spain , in fact, forecasts a return to pre-recession numbers this year. European minnow, Poland also looked to score big at the stands including an opening ceremony that featured Poland's iconic leader, Lech Walesa. The country's tourism ministry also essayed a forecast for 2011 saying they expected year-on-year growth for the next couple of years to exceed 5% factoring the European Football Championships next year.

For two of the four "BRIC" countries, Brazil and India the forecast was definitively north. An ITB Berlin commissioned survey showed that "people in India and Brazil are eager to travel in 2011". Of those surveyed an impressive 49 percent of Brazilians said they intend to travel in 2011 with 21% wanting a holiday similar to the one they took in 2010. The Indian respondents were equally bullish on travel with the survey showing that "forty-three percent of the respondents are planning one or more trips, 33 percent are planning holiday trips similar to those they undertook in 2010." US respondents were less upbeat with 16% saying they were unlikely to travel in 2011 while 32% said they plan to travel less in 2011 as compared ti 2010. A mere 19% of Americans surveyed said they intend to take more trips and 34% expected to plan a holiday similar to the one they had taken in 2010.

Organizations like the Pacific Asia Travel Association were more definitive about their forecasts. While releasing forecasts of travel demand for 42 destinations within the Asia Pacific region, PATA, came up with a precise number of 7% for the forecasted growth rate for the next couple of years. The travel organization also forecasted numbers for other regions going out two years noting a decline in market share of 2% for the Americas while Asia is expected to gain nearly 2%.

Nevertheless, the frailty of forecasting in other industries and areas such as finance and geopolitics does not appear to deter the United Nations World Tourism Organization, an organization that casts itself as the "global forum for tourism policy issues and a practical source of tourism know-how" from boldly forecasting, seemingly without caveats, "an increase in international tourist arrivals of between four and five per cent – a rate slightly above the long-term average." If it were to come to pass, that would be exceptionally good.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS.President and ceo of New York City Hotel Association since January 2017. View all posts by Vijay Dandapani